Ravenstar LLC v. One Ski Hill Place LLC
2016 COA 11
Colo. Ct. App.2016Background
- Five Colorado entities contracted to purchase to-be-built condos from OSHP in 2008, paying earnest money and 15% deposits each.
- Purchasers failed to close by the 2010 deadline due to financing shortfalls.
- Contracts allowed OSHP to retain all or a portion of deposits as liquidated damages up to 15% or elect to pursue actual damages with deposits applied.
- OSHP elected liquidated damages and retained the full deposits after default.
- Parties entered August 11, 2014 and October 27, 2014 stipulations narrowing claims; the court later granted final judgment and ordered costs and attorney fees to OSHP; plaintiffs appeal only the breach-of-contract judgment and the fee award.
- The appellate court affirmed, upholding the enforceability of the optional liquidated-damages clause and the fee-award decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the option to choose actual damages compatible with a valid liquidated damages clause? | Ravenstar argues the option negates intent to liquidate. | OSHP argues optional liquidation is permissible under Colorado law. | Yes; option does not render the clause unenforceable. |
| Did the presence of an option negate the parties' intent to liquidate damages in advance? | Ravenstar contends the option signals penalty mindset. | OSHP contends intent to liquidate remains intact as a permissible remedy. | No; intent to liquidate remains valid where the option was part of the contract. |
| Were the attorney-fee and cost awards proper under the August 11 stipulation and related Rule 121 standards? | Ravenstar challenges inclusion of fees related to unsettled/covered claims. | OSHP maintains the fee award tracked the stipulation and applicable Hensley framework. | Yes; the district court did not abuse discretion in awarding reasonable fees and costs consistent with the stipulation and related standards. |
Key Cases Cited
- Cullen v. Park Club Land Co., 67 Colo. 210, 184 P. 303 (1919) (seller may elect to retain liquidated damages or sue for the unpaid price)
- Steinhoff v. Fisch, 847 P.2d 191 (Colo. App. 1992) (liquidated damages may be a permissive remedy not bar to other remedies)
- Lefemine v. Baron, 573 So.2d 326 (Fla. 1991) (optional liquidated-damages provision may indicate punitive intent)
- Grossinger Motorcorp., Inc. v. Amer. Nat'l Bank & Tr. Co., 607 N.E.2d 1337 (Ill. App. Ct. 1992) (optional nature of liquidated damages shows parties never intended a fixed damages sum (cake-and-eat-it-too))
- Royer v. Carter, 233 P.2d 539 (Cal. 1951) (enforceability of optional liquidated-damages provision (California view))